Just hours after learning that Microsoft would be closing a number of game studios this week, Dinga Bakaba, head of Microsoft-owned Arkane Lyon, decided to publicly tell the company what he thought of the decision. “Don’t rush us into gold fever gambling, don’t use us as front men for misjudgments/blind spots, don’t make our work environment a Darwinian jungle,” Bakaba said wrote on X.
Bakaba, whose studio was not affected by the layoffs this week, said his message was aimed at “every executive reading this,” including the Xbox executives behind the recent wave of layoffs. It was a rare public expression of criticism, but sources at Microsoft tell me it reflects growing dissatisfaction and fear among Xbox employees about what comes next.
Microsoft’s latest round of layoffs shocked both employees and fans. Arcane Austin is big Redfall The update with a new offline mode and the DLC were on the way is being worked on Just a few hours before the studio closed.
Xbox employees were surprised by the closure of Tango Gameworks
The closure of Tango Gameworks, the studio behind it Hi-Fi Rush, surprised people the most. The game was considered an Xbox hit, received critical acclaim, and was released on PS5 earlier this year. Even Microsoft was happy with it Hi-Fi Rush.
“Hi-Fi Rush was a breakthrough for us and our players by every measure and expectation,” said Aaron Greenberg, head of Xbox games marketing. just a year ago. “We couldn’t be happier with what the team at Tango Gameworks has delivered with this surprise release.”
Greenberg and Xbox boss Phil Spencer both visited Tango Gameworks in September, interacting with the team and playing games posing for group photos. Now the studio is the latest victim of layoffs that have rocked the games industry over the past 18 months.
Three Bethesda studios – Arkane Austin, Tango Gameworks and Alpha Dog Games – are closing and the Roundhouse Studios team is moving to ZeniMax Online Studios. The studio closures come less than six months after Microsoft laid off 1,900 Activision Blizzard and Xbox employees, and just months after Sony closed some of its own game studios and laid off around 900 employees. The depressing list of layoffs at game studios continues to grow weekly GTA 6 And BioShock Publisher Take-Two laid off hundreds of employees and cut projects last month.
There is currently uncertainty about the future at Xbox and questions about Microsoft’s gaming strategy. While Microsoft anticipates a more PC-like future for its Xbox console, the company continues to struggle with a decline in Game Pass subscribers, weak Xbox sales and delays in game releases.
A combination of these events led to four previously Xbox-exclusive games recently releasing on the PS5, with some also landing on the Nintendo Switch. I reported earlier this year that Microsoft was considering the launch War equipment to competing consoles, and we’re still waiting to see if there’s a long rumor War equipment Collection is ever confirmed. Either way, I’m still expecting more Xbox games to come to PS5 and Switch, and it will be interesting to see if June’s Xbox games presentation includes any new announcements for competing hardware.
Microsoft has discussed adding Call of Duty to Game Pass
Microsoft has also had internal debates about whether to release new versions of call of Duty in Game Pass. I understand that this is a debate internally that has been going on for some time, with some having concerns about revenue call of Duty Typically, games generated for Activision Blizzard are affected by Game Pass.
I’m told that Microsoft has also considered raising the price of Game Pass Ultimate again. These are just considerations, so a final decision could mean we still see a future call of Duty Release appears in most versions of Game Pass. The internal debate reflects the fact that Microsoft’s Xbox strategy has shifted from just delivering its games exclusively through Game Pass to considering bringing more Xbox games to multiple platforms.
In yesterday’s memo from Xbox Game Studios head Matt Booty, there was a hint of a reprioritization of Bethesda teams that we may see elsewhere at Xbox. “These changes are based on prioritizing influential titles and further investing in Bethesda’s portfolio of blockbuster games,” Booty said, before noting that Xbox is doubling down on its commitment to Bethesda franchises that are “best positioned for success.”
did Hi-Fi Rush Are you really not hitting this bar? Now, there will inevitably be questions about which other Xbox games aren’t “best positioned for success.”
Xbox now has a strong lineup of games planned for 2024, with Senua’s Saga: Hellblade II is set to debut in a few weeks on May 21st. I understand Hellblade II is another game that Microsoft has considered for the PS5. If that ever happens, it is not clear at this point whether even that would be considered a success.
Xbox employees are now preparing for what comes next, as it seems unlikely that we’ve seen the last of layoffs and cuts in Microsoft’s gaming division. There are rumors among employees that the core Xbox Game Studios studios will have to make cuts next. Last month, Microsoft reported that Xbox hardware sales were down 31 percent year-over-year, in an apparent admission that this was “due to lower volume of consoles sold.” Last year, Microsoft reported a 30 percent decline in Xbox hardware sales, blaming “increased console supply” in 2022 compared to last year. Sony’s PS5 sales have also slowed, but not as much as Microsoft’s.
Without Activision Blizzard, Microsoft’s Xbox business won’t grow
While Xbox hardware sales are a concern, Microsoft has been beating the drum for Xbox Game Pass in recent years, telling us: “The [Xbox] Business doesn’t depend on how many consoles you sell.” However, Microsoft’s recent earnings showed that without Activision Blizzard, Xbox content and services, which includes Game Pass, would have increased by just a single percent and that the Total gaming revenue would have declined without this huge acquisition. Microsoft CFO Amy Hood now expects Xbox hardware sales to fall again next quarter.
Without Activision Blizzard, Microsoft’s gaming business isn’t growing right now, and how that plays out over the course of 2024 will be crucial for all Xbox studios. Microsoft has a busy fall ahead of it with Xbox, Bethesda is currently targeting September Starfield extension Shattered spaceActivision is planning the next one call of Duty for the end of October and Explained And Microsoft Flight Simulator 2024 expected to follow in November. To top it all off, Indiana Jones is currently scheduled for December.
If Microsoft’s game studios can deliver all of these games on time, there will be plenty to play on Xbox this holiday, with a new one War equipment The title is expected to be announced during the Xbox Summer Showcase along with some release dates for other anticipated Xbox games.
Microsoft will be banking on some new game announcements to elevate this Doom around Xbox. But the company’s gaming strategy still seems unclear — and the challenges extend beyond a handful of holiday launches.